+120 more)
Mandy Sleight has over 15 years of insurance knowledge and expertise in auto, home, life, health, pet, supplemental benefits, and other insurance products. She’s a sought-after insurance expert, appearing in Bankrate.com, Moneygeek.com, U.S. News & World Report, Reviews.com, CNET, and other publications, and she's been writing for Compare.com since 2023.
Mandy uses her background and experience working for well-known insurance companies like State Farm and Nationwide Insurance to create engaging and easy-to-understand content that helps readers make smarter insurance choices that have a positive effect on their budgets and finances.
)
Matthew Gross is an editor at Compare.com. With a background in editing and SEO, he’s passionate about creating content that helps readers get the information they need to make more informed decisions. Prior to Compare.com, Matthew brought his user-centered approach to his work with global brands like Apple and Adobe.
Matthew graduated from Illinois State University, where he earned his bachelor’s degree in Journalism.
Updated
At Compare.com, it’s our mission to give you the tools to find the best (and most affordable) insurance for your unique needs and budget. We strive to provide information that’s helpful, clear, and unbiased, and we believe that comparing insurance companies should never put you at risk of spam. Our editorial team — which is made up of experienced writers, editors, insurance agents, and data analysts — has spent thousands of hours researching and creating the coverage overviews, side-by-side comparisons, and detailed reviews you see across our site.
While we make money through partnerships with some of the brands we discuss in our articles, our editorial team operates 100% independently, and these partners never influence or affect the topics, reviews, ratings, or recommendations we provide. We never guarantee favorable reviews or mentions in exchange for compensation from any brands or partners, and we uphold strict editorial standards to ensure our content is always independent, truthful, and unbiased.
Pay-per-mile car insurance is a type of usage-based insurance that bases your rates on the actual mileage you drive rather than estimates or broad risk categories. While traditional insurance uses fixed premiums, mileage-based insurance combines a fixed base rate with a per-mile rate to calculate your premium.
Pay-per-mile car insurance may save you money if you’re a low-mileage driver, remote worker, or have a short commute. But it might not be the best fit if you spend a lot of time on the road.
In this guide, we’ll break down how pay-per-mile insurance works, who saves the most money, and some of the best companies that offer it.
Pay-per-mile insurance combines a fixed base rate with a per-mile rate to determine your premium.
People who drive fewer than 10,000 miles per year could benefit from pay-per-mile coverage.
Some insurance companies use telematics to track driving behavior, which can affect your premium, while others only track mileage.
Pay-per-mile car insurance, also known as pay-as-you-drive or pay-as-you-go insurance, is a usage-based insurance model that charges you based on the miles you drive.[1] Insurers use traditional rating factors — like your age, driving record, ZIP code, credit history, and vehicle type — plus a per-mile rate to calculate your monthly premium.
Traditional car insurance sets a fixed premium using only the standard rating factors, regardless of how often you drive. While it’s not pay-per-mile insurance, many insurers offer telematics programs that provide savings for safe driving, including your mileage.
Pay-per-mile insurance can save you money if you are a low-mileage driver, work remotely, are retired, or frequently use public transportation.
But there are drawbacks. If you frequently take road trips or have a long commute, your rates may increase. Mileage tracking also raises privacy concerns about how your insurer uses your driving data. We’ll get into that more later.
Here’s how pay-per-mile insurance works.
Your base rate is a fixed monthly fee for your policy coverage. Insurers use traditional rating factors to determine premiums. The per-mile rate is a variable fee that multiplies your driven miles by a preset rate.
Your monthly premium can change depending on your driving habits and total mileage for that month.
Insurers use different methods for mileage tracking depending on your vehicle’s year, make, and model. Options include:
Telematics devices plugged into your car’s OBD-II port
Mobile apps that track mileage through GPS
Connected car features
Photo-based odometer readings
Some companies count only mileage. But others also monitor driving behavior, like speeding and hard braking, which may affect your rate.
To prevent surprise charges, many pay-per-mile insurers offer a daily mileage cap of typically between 150 and 250 miles per day. Once you exceed the cap, your insurer won’t charge you for the extra miles.
So if you take a long road trip, your insurer won’t penalize you with a sky-high bill. But frequent long drives will affect your overall monthly cost.
Several insurers now offer pay-per-mile car insurance. Availability varies by state and ZIP code, so it’s important to check local options before applying.
Below, you’ll find our top picks for mileage-based insurance. We explain how each program works and the pros and cons to consider for different insurers.
Offers an unlimited-mileage option
Track trips using mobile app
Provides feedback for safer driving habits
Required plug-in device
Driving behavior can affect rates
Available in only 22 states
Allstate’s Milewise program uses a plug-in telematics device to track your mileage, speed, braking, and the time of day you drive. You can include multiple vehicles in the program and choose the pay-per-mile or unlimited option for each car.
Allstate caps daily mileage at 250 miles in most states and 150 miles in Illinois, Indiana, Ohio, and Oregon.
Available in most states
Simple billing with clear rate breakdown
Safe driving bonus
Tracks driving habits
Tracks mileage using plug-in device or connected car
Not all vehicles are eligible
Nationwide’s SmartMiles works similarly to Milewise but doesn’t have an unlimited option. It requires a plug-in device or connected car to track mileage and driving behavior, but risky habits won’t increase your rates. You can also save up to 10% in the first policy period for driving safely.
SmartMiles has a daily limit of 250 miles and isn’t available in Alaska, Hawaii, Louisiana, North Carolina, New York, or Oklahoma.
Doesn’t use GPS or track behavior
No hardware to install
Offers significant savings compared to traditional policies
Must upload odometer photo each month
Available in only eight states
Requires smartphone for photo collection
Mile Auto stands out by using photo-based mileage tracking instead of an app or plug-in device. Just submit a photo of your odometer every month, and Mile Auto uses it to determine your premium.
But Mile Auto is available only in Arizona, Colorado, Florida, Georgia, Ohio, Oregon, Tennessee, and Texas.
User-friendly mobile app
Fast claims processing
Offers electric- and hybrid-vehicle discounts
Tracks driving habits
Available in only nine states
Potential privacy concerns
Lemonade uses AI-driven pricing and data tracking through its mobile app to determine your monthly premium. Mileage is the main factor that determines your rate, which may fluctuate from month to month.
Lemonade car insurance is available in Arizona, Colorado, Illinois, Indiana, Ohio, Oregon, Tennessee, Texas, and Washington. But make sure you’re OK with having your driving data tracked before signing up.
Compare personalized quotes and pay only for the coverage you need.
Pay-per-mile insurance can offer real savings for the right kind of driver. While low-mileage drivers are the clear winners, others may end up paying more than they would with a traditional car insurance program.
Check out the table below to learn who benefits from pay-as-you-go car insurance and who might be better off with a traditional car insurance company, according to Compare.com research.
Who Benefits | Who Should Reconsider |
|---|---|
|
|
)
Signing up for pay-per-mile insurance is a fairly simple process, but it’s important to compare companies and understand the requirements. Follow these steps to get started:
Review your current driving habits. Estimate your average monthly or annual mileage to figure out if you’re a good candidate. Pay-per-mile insurance is usually best if you drive fewer than 10,000 miles per year.
Compare pay-per-mile programs. Check availability, tracking methods, privacy concerns, and mileage caps.
Get a personalized quote. Use an insurance comparison website to get your custom rate based on your location, vehicle, and estimated mileage.
Choose your plan and enroll. Sign up online or with an agent. You’ll likely need to agree to mileage and driving-habit tracking using a device, app, or odometer photo.
Install the device or app. Some programs require a telematics device or mobile app to track your driving habits and mileage.
Drive and monitor your bill. Track your monthly mileage and how it affects your bill. Adjust driving habits if necessary to maximize savings.
)
Pay-per-mile car insurance programs rely on data to calculate your rates, but what they collect — and how they use it — varies. Most insurers track mileage using telematics devices, smartphone apps, or odometer photos. Some also collect data on your driving behavior, like speed, braking, acceleration, and the time of day you drive.
If you’re concerned about privacy, you should choose a program that matches your comfort level. For example, Mile Auto only collects odometer readings, while Milewise and SmartMiles gather more detailed telematics data.
Insurers typically use the data to calculate premiums, monitor risk, and improve their car insurance programs, rather than selling it to third parties. Still, it’s smart to review the privacy policy before enrolling to understand what data the insurer collects and how the company stores and shares it.
Get rates from 100+ top insurers and save money today.
If you’re still unsure about switching insurance, we can help. Here are answers to some common questions to help you decide if pay-per-mile coverage is right for you.
It depends. You could save money with pay-per-mile car insurance if you drive fewer than 10,000 miles per year. Pay-per-mile car insurance could also be worthwhile if you have an extra vehicle, a short commute, or access to public transportation.
It depends. Pay-per-mile costs vary by company and location. Insurers calculate a base rate using traditional factors like your age and driving record, plus a per-mile rate. The fewer miles you drive, the less you pay.
You pay a base rate, which depends on factors like your age, ZIP code, and driving history, plus a rate based on the actual miles you drive. Insurers use a plug-in device, mobile app, connected car, or odometer photo to track your mileage.
Many insurers offer pay-per-mile car insurance, including Allstate, Nationwide, Lemonade, and Mile Auto. Availability varies by state and ZIP code.
)
)
)
){kind=logo}
)
)
)
)
)
Mandy Sleight has over 15 years of insurance knowledge and expertise in auto, home, life, health, pet, supplemental benefits, and other insurance products. She’s a sought-after insurance expert, appearing in Bankrate.com, Moneygeek.com, U.S. News & World Report, Reviews.com, CNET, and other publications, and she's been writing for Compare.com since 2023.
Mandy uses her background and experience working for well-known insurance companies like State Farm and Nationwide Insurance to create engaging and easy-to-understand content that helps readers make smarter insurance choices that have a positive effect on their budgets and finances.
Matthew Gross is an editor at Compare.com. With a background in editing and SEO, he’s passionate about creating content that helps readers get the information they need to make more informed decisions. Prior to Compare.com, Matthew brought his user-centered approach to his work with global brands like Apple and Adobe.
Matthew graduated from Illinois State University, where he earned his bachelor’s degree in Journalism.
)
)
